Huge fund management mandates generated by the Mandatory Provident Fund (MPF) should not be monopolised by large insurance companies, according to Principal Insurance Company (Hong Kong) director Christopher Reddy.
Mr Reddy said new and smaller companies should be allowed to enter the scheme, expected to generate an additional $40 billion for the fund management industry.
Principal Insurance was set up in 1879 in the United States but only opened an office in Hong Kong in November last year. Mr Reddy said he was confident the company could compete on an equal basis with other insurance companies more established in the territory.
'The MPF scheme is new for Hong Kong. There should be no preconceptions about which companies can provide the best services for the scheme,' Mr Reddy said.
He indicated the company may forge alliances with other insurers to cut administrative costs.
Some Legislative Councillors are concerned insurance companies may reject low income clients, effectively banning them from protection under the MPF.
Mr Reddy said smaller insurers such as Principal were ideally placed to take on small-to-medium sized companies with lower income workers.
